Tyro back to pre-outage levels but hundreds still hurting

Tyro back to pre-outage levels but hundreds still hurting

Tyro Payments (ASX: TYR) has seen its operations return to normal levels following a three-week-long EFTPOS terminal outage, but hundreds of merchants are still without a working machine.

According to Tyro's 'Final Status Update' posted after the market closed yesterday, the company's program of collecting, repairing and returning impacted terminals has resulted in the number of EFTPOS machines connected to its network returning to pre-incident levels.

During the worst of the outage, caused by an issue in specific versions of the terminal platform software supplied by manufacturer Worldline, only approximately 75 per cent of total terminals were connected.

Since 12 January 2021, the percentage of online terminals has steadily increased.

As it stands today, the percentage of EFTPOS machines online is hovering between 90 and 100 per cent - around where Tyro was pre-incident.

Despite this update, the company says there are still 486 merchants who do not have an operational terminal.

"These are merchants where, despite all our best efforts, we have not yet been successful in recovering their impacted terminals for repair," says Tyro.

"We will continue our efforts to bring these merchants back online."

There are 1,490 merchants who have at least one fully operational terminal but still have at least one non-functioning unit.

"Our efforts to recover and repair these remaining non-operational units continues, with an active engagement program in place seeking to coordinate collection of these terminals," says Tyro.

There are another 643 merchants with 'bricked' terminal types that are no longer manufactured.

According to the fintech, the majority of these were purchased by merchants, rather than rented "as is Tyro's current standard operating model".

"These units are obsolete and Tyro has been encouraging these merchants to upgrade to current terminal models," says Tyro.

"In the circumstances Tyro is replacing these terminals (at a capitalised cost of approximately $0.5 million) on terms no less favourable to the impacted merchants.

"New units are being dispatched to these still impacted merchants."

One of these 643 merchants impacted by Tyro's decision to not replace "obsolete" terminals spoke to Business News Australia.

The source, who wished to remain anonymous, said their now obsolete terminals came with their business when it was purchased three years ago.

"I don't recall paying any rental fees," the merchant said.

"We stayed with Tyro because they fully integrate into our POS system.

"I went and purchased a Square reader to get us through, otherwise things would be very different by now!"

The outage of Tyro EFTPOS machines saw US-based Viceroy Research short the fintech stock earlier this month.

The short seller released two reports, claiming the situation was worse than Tyro was saying, and that there would be no quick fix for the problem.

The incident has also sparked discussions of a potential class action.

Law firm Bannister Law said it was exploring a possible class action against Tyro on behalf of impacted customers and potentially TYR shareholders as well.

Shares in TYR are down 2.37 per cent to $2.47 per share at 10.23am AEDT.

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Business News Australia

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